GERMANY. • 533
red tape. As a consequence of the honesty and the high freight rates, they pay a profit, but on account of the red tape this money defrays the expenses of the military establishment instead of being used to improve the transportation service. A great deal of money is spent on stations for passenger traffic, but the freight service is not what it ought to be, and the transportation of ore from Loth-ringen to Westphalia costs 1 cent per ton per mile, while coke and finished material are from 30 to 50 per cent. more. Private ownership of railroads in America has resulted in spending money for improvements, for larger cars and heavier engines, and has cut down the rates far below the German tariff, even though the American roads traverse districts more sparsely settled than the western provinces of Germany.
In addition to the questions of freight which have been discussed, we have the important fact that Westphalia possesses old-fashioned works surrounded by communities of skilled workmen. The task of starting.a steel works where such an industry has not existed before is hard enough in America, but in any other part of the world it is still harder, for in our land men are accustomed to move, and readily break away from old associations. A more important matter is the destruction of capital involved in a transfer of the iron industry, for a works in Westphalia cannot be transported bodily to Lothringen. If the attempt were made it is doubtful if twenty per cent, of the money would be utilized, and this being so it becomes cheaper to destroy the old and to build anew. The interest and depreciation on a steel works, including the blast furnaces, is more than the cost of transporting the ore a considerable distance. In a Westphalian works, which is all paid for and has no outstanding bonds, the depreciation account may be neglected and the interest charges looked upon as profit, while in a new works in Lothringen these items become a direct load upon the cost sheet. Thus we find many different ways of working. The old plants in the Euhr are buying properties in Lothringen and bringing ore to their furnaces and so are the steel works in the valley of the Saar. Other plants are making pig-iron at the mines and sending it to Westphalia and to Aachen, while still other works are being built at the ore bank, the coke being brought from the Ruhr.
The production of the whole Minette district, including Lothringen, Luxemburg and France, was less than three million tons'